Iowa, SD lead region in economic growth
Iowa topped the Midwest region for economic growth in May, and South Dakota came in second among nine states.
The Institute for Supply Management, formerly the Purchasing Management Association, began formally surveying its membership in 1931 to gauge business conditions.
The Creighton Economic Forecasting Group uses the same methodology as the national survey to consult supply managers and business leaders. Creighton University economics professor Ernie Goss oversees the report.
The overall index ranges between 0 and 100. Growth neutral is 50, and a figure greater than 50 indicates an expanding economy over the next three to six months.
Here are the state-by-state results for May:
South Dakota: For the sixth month in a row, South Dakota's overall index remained above growth neutral. It hit 61.7 in May, compared with 59.4 in April. Components of the index were new orders at 69.0, production or sales at 71.1, delivery lead time at 49.9, inventories at 51.9 and employment at 66.6. Manufacturers continue to report very healthy growth. The average hourly wage for manufacturing workers rose by 3.2 percent over the past year, Goss said.
Iowa: For a fifth straight month, Iowa's overall index remained above growth neutral. The index rose to 70.0 in May from 69.1 in April. Components of the index were new orders at 75.3, production or sales at 75.2, delivery lead time at 59.6, employment at 70.9 and inventories at 68.9. "Both durable- and nondurable-goods producers in Iowa experienced healthy growth for the month. I expect somewhat slower growth in agriculture to pull overall state growth somewhat lower, but it will remain positive and healthy," said Goss.
Arkansas: The state's overall index for May dipped to 55.1 from 56.9 in April. Components of the index were new orders at 43.1, production or sales at 56.1, delivery lead time at 51.6, inventories at 66.7 and employment at 58.2. "Nondurable-goods producers in the state continue to shed jobs. However, durable-goods manufacturers' growth more than offset this weakness," Goss said. "Despite the national turnaround in construction, Arkansas builders have yet to begin any significant expansion," he said.
Kansas: The Kansas index for May rose to 53.1 from 52.3 in April. Index components were new orders at 67.2, production or sales at 60.1, delivery lead time at 45.1, employment at 55.0 and inventories at 38.3. "Durable-goods manufacturers in Kansas, especially aircraft and aircraft parts producers, are experiencing healthy growth. Nondurable-goods manufacturers are also benefiting from an expanding economy, but at a somewhat slower pace than their heavy manufacturing counterparts," Goss said.
Minnesota: Minnesota's overall index remained above growth neutral for the sixth month in a row, but it dropped to 55.2 from April's 55.7. Components of the index were new orders at 53.8, production or sales at 55.4, delivery lead time at 54.5, inventories at 55.7 and employment at 56.6. "Durable-goods producers, including metal manufacturers, report strong business growth," Goss said. And nondurable-goods manufacturers, except for food processors, also reported upturns in economic activity for the month, he said.
Missouri: The state's overall index climbed to 54.6, compared with 52.8 in April. Components of the May survey were new orders at 54.3, production or sales at 57.7, delivery lead time at 52.6, inventories at 48.5 and employment at 59.8. "Durable-goods manufacturers, excluding vehicle manufacturers, added workers for the month. Nondurable-goods manufacturing, including food processors, continue to experience slow to no growth," Goss said.
Nebraska: The stronger U.S. dollar is cutting into the growth recorded by Nebraska's businesses, Goss said. The overall state index for May sank to 53.2 from April's 55.6. Components of the index were new orders at 54.2, production or sales at 55.4, delivery lead time at 49.3, inventories at 54.5 and employment at 52.4. Durable- and nondurable-goods manufacturers reported healthy activity in recent months, Goss said.
North Dakota: North Dakota's overall index dropped but remained above growth neutral. The index hit 55.4 in May, compared with 57.9 in April. Components of the index were new orders at 57.8, production or sales at 53.3, delivery lead time at 54.2, employment at 54.3 and inventories at 57.3. Nondurable-goods manufacturers, especially food processors, are experiencing very healthy growth, Goss said. "On the other hand, durable-goods manufacturers are experiencing pullbacks in economic activity," he said.
Oklahoma: The state's dropped to 55.6 in May from April's 59.8. Components of the index were new orders at 53.3, production or sales at 56.7, delivery lead time at 41.6, inventories at 71.0 and employment at 55.4. "As a result of very healthy growth among Oklahoma manufacturers, the average hourly wage rate rose by 6.2 percent over the past year, or well above both the U.S. and regional averages. Growth continues to be much stronger among durable-goods producers than nondurable-goods manufacturers such as food processors," said Goss.